(and do you need an advisor to accomplish it?)

I started this blog over a year ago, and then got sidetracked working with a firm that was contracted to completely revamp the wealth management process at a large accounting firm.  I learned a lot, and am glad for that.  It will help with the message I’m developing in this blog about how to find a financial advisor you can trust. (Interestingly, from a philosophical standpoint, if you use a CPA for taxes, they probably know more about you than any other financial professional, and using them for wealth management would seem logical.  Unfortunately,  from my experiences, their culture, temperament and processes, or lack of process, sometimes makes finding the right advisor challenging.  But that’s a story for another time.)

There is nothing more fundamental than an individual’s right to be financially independent.  A good friend and advisor once outlined being financially independent as “being able to do what you want, when  you want, with whom you want, and knowing you can afford it”.  This may be a bit utopian, but it’s certainly a good goal!

There is also nothing that requires as much dedication to purpose, nurturing, perseverance and expertise.  So I think the very first question that any of us should address is –

“Do we need an advisor to achieve our financial goals?”

There are a lot of opinions about this question, but from my personal experience, I’m going to take a leap and say that many of us would benefit from connecting with someone we can trust and develop confidence in, so they can help us manage a very complex part of our lives.

As money has become more complex, the time, energy and expertise necessary to manage it have become more intensive.  I read an article by William Bernstein and I really love the way he outlined his answer to the question.

He proffered that to invest and plan successfully, you need at minimum four talents:

• A real interest in investing and planning.  Just like any other hobby or passion you need to have a passion and interest – otherwise you’ll do a poor job of it.
• The capability to do the math – fractions are a challenge for many, let alone standard deviation and correlation analysis!
• The knowledge base and the ability to stay current – markets are very complex and require both a current understanding of investment vehicles available, as well as the ability to stay connected to what’s happening.
• The emotional fortitude to stick with your plan faithfully.  It sounds easy but look back on the emotions you experienced in the 2008 Great Financial Disaster and measure your strength and fortitude against that!

Bernstein put forth the premise that less than 10% of the population would get passing grades on each of the above points and he suggests that to succeed you must have all four.  Thus, in a state of nature, just 0.01% of us overall have what it takes to truly succeed over time. Even if you assume that 30% of us are successful in each count, only about 1% of us would possess all four (if my math is correct)!

If you are in the 1% I applaud you.  You’ve probably already amassed a fortune and certainly don’t need any guidance! (Although you may want someone to manage your wealth so you can do other, more interesting things).   If not, then I think what follows over the next few weeks or months will be of interest as you either search for a professional advisor, or evaluate your existing relationship.

My singular goal is to give anyone that has an interest in thinking through the decision process of how to manage their financial future, my experiences and expertise as an insider for over 30 years in the industry.   If, after thoughtful review, you decide you would benefit from professional help, I hope and believe that some of the insights I’m going to share will help you find the right professional for you, that has an organization whose purpose in life is on maintaining and perfecting the talents necessary to assist you in your journey toward financial independence.